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Securities

12 Months Ended

Dec. 31, 2022

Securities [Abstract]

Securities

Note 4. Securities

The amortized cost and fair value of securities available-for-sale and securities held-to-maturity at December 31, 2022 and 2021 are summarized as follow (in thousands):


		December 31, 2022
					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
Available-for-sale:		Cost			Gains			Losses			Value
U.S. Treasury		$	241,506		$	—		$	(17,853)		$	223,653
U.S. Government-sponsored enterprises (GSEs)			1,593			—			(18)			1,575
Municipal securities			19,210			17			(616)			18,611
Other debt securities			32,959			—			(2,408)			30,551
Mortgage-backed securities (GSEs)			233,948			6			(24,451)			209,503
Total		$	529,216		$	23		$	(45,346)		$	483,893


		December 31, 2022
					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
Held-to-maturity:		Cost			Gains			Losses			Value
U.S. Treasury		$	150,295		$	—		$	(5,613)		$	144,682
U.S. Government-sponsored enterprises (GSEs)			50,539			—			(8,037)			42,502
Municipal securities			53,694			—			(7,550)			46,144
Mortgage-backed securities (GSEs)			31,421			—			(4,136)			27,285
Total		$	285,949		$	—		$	(25,336)		$	260,613


		December 31, 2021
					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
Available-for-sale:		Cost			Gains			Losses			Value
U.S. Treasury		$	138,212		$	64		$	(518)		$	137,758
U.S. Government-sponsored enterprises (GSEs)			21,898			76			(173)			21,801
Municipal securities			67,310			512			(2)			67,820
Other debt securities			26,989			313			(82)			27,220
Mortgage-backed securities (GSEs)			228,011			971			(1,128)			227,854
Total		$	482,420		$	1,936		$	(1,903)		$	482,453


		December 31, 2021
					Gross			Gross
		Amortized			Unrealized			Unrealized			Fair
Held-to-maturity:		Cost			Gains			Losses			Value
U.S. Government-sponsored enterprises (GSEs)		$	31,023		$	20		$	(87)		$	30,956
Municipal securities			45,946			63			(19)			45,990
Total		$	76,969		$	83		$	(106)		$	76,946

At December 31, 2022 and 2021, securities with a carrying value totaling approximately $304.8 million and $201.2 million, respectively, were pledged to secure public funds and securities sold under agreements to repurchase.

During the first quarter of 2022 and the fourth quarter of 2021, the Company transferred $162.4 million and $74.6 million, respectively, of available-for-sale securities to the held-to-maturity category, reflecting the Company’s intent to hold those securities to maturity. Transfers of investment securities into the held-to-maturity category from the available-for-sale category are made at fair value at the date of transfer. The related $2.0 million of unrealized holding loss that was included in the transfer is retained in accumulated other comprehensive income, net of tax, and in the carrying value of the held-to-maturity securities. This amount will be amortized as an adjustment to interest income over the remaining life of the securities. This will offset the impact of amortization of the net premium created in the transfer. There were no gains or losses recognized as a result of this transfer.

The Company has entered into various fair value hedging transactions to mitigate the impact of changing interest rates on the fair values of available for sale securities. See Note 18 – Derivatives Financial Instruments for disclosure of the gains and losses recognized on derivative instruments and the cumulative fair value hedging adjustments to the carrying amount of the hedged securities.

The amortized cost and estimated market value of securities by contractual maturity, are shown below (in thousands). Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


		December 31, 2022
		Amortized			Fair
Available-for-sale:		Cost			Value
Due in one year or less		$	270		$	270
Due from one year to five years			212,645			199,046
Due from five years to ten years			72,010			65,065
Due after ten years			10,343			10,009
			295,268			274,390
Mortgage-backed securities			233,948			209,503
Total		$	529,216		$	483,893

Held-to-maturity:
Due in one year or less		$	—		$	—
Due from one year to five years			150,295			144,685
Due from five years to ten years			38,069			32,848
Due after ten years			66,164			55,795
			254,528			233,328
Mortgage-backed securities			31,421			27,285
Total		$	285,949		$	260,613

The following tables present the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities available-for-sale and securities held-to-maturity have been in a continuous unrealized loss position, as of December 31, 2022 and 2021 (dollars in thousands):


		December 31, 2022
		Less than 12 Months								12 Months or Greater								Total
					Gross			Number					Gross			Number					Gross			Number
		Fair			Unrealized			of		Fair			Unrealized			of		Fair			Unrealized			of
Available-for-sale:		Value			Losses			Securities		Value			Losses			Securities		Value			Losses			Securities
U.S. Treasury		$	134,414		$	(7,610)		9		$	89,239		$	(10,243)		11		$	223,653		$	(17,853)		20
U.S. Government-sponsored enterprises (GSEs)			1,266			(14)		1			309			(4)		2			1,575			(18)		3
Municipal securities			13,146			(616)		20			—			—		—			13,146			(616)		20
Other debt securities			25,044			(1,866)		20			5,506			(542)		6			30,550			(2,408)		26
Mortgage-backed securities (GSEs)			111,598			(8,968)		86			96,285			(15,483)		28			207,883			(24,451)		114
Total		$	285,468		$	(19,074)		136		$	191,339		$	(26,272)		47		$	476,807		$	(45,346)		183

		December 31, 2022
		Less than 12 Months								12 Months or Greater								Total
					Gross			Number					Gross			Number					Gross			Number
		Fair			Unrealized			of		Fair			Unrealized			of		Fair			Unrealized			of
Held-to-maturity:		Value			Losses			Securities		Value			Losses			Securities		Value			Losses			Securities
U.S. Treasury		$	144,683		$	(5,613)		4		$	—		$	—		—		$	144,683		$	(5,613)		4
U.S. Government-sponsored enterprises (GSEs)			13,048			(2,503)		3			29,451			(5,534)		10			42,499			(8,037)		13
Municipal securities			40,770			(6,387)		28			5,375			(1,163)		7			46,145			(7,550)		35
Mortgage-backed securities (GSEs)			—			—		—			27,285			(4,136)		5			27,285			(4,136)		5
Total		$	198,501		$	(14,503)		35		$	62,111		$	(10,833)		22		$	260,612		$	(25,336)		57


		December 31, 2021
		Less than 12 Months								12 Months or Greater								Total
					Gross			Number					Gross			Number					Gross			Number
		Fair			Unrealized			of		Fair			Unrealized			of		Fair			Unrealized			of
Available-for-sale:		Value			Losses			Securities		Value			Losses			Securities		Value			Losses			Securities
U.S. Treasury		$	99,959		$	(518)		11		$	—		$	—		—		$	99,959		$	(518)		11
U.S. Government-sponsored enterprises (GSEs)			14,156			(168)		2			579			(5)		2			14,735			(173)		4
Municipal securities			2,519			(2)		1			—			—		—			2,519			(2)		1
Other debt securities			5,983			(82)		6			—			—		—			5,983			(82)		6
Mortgage-backed securities (GSEs)			159,725			(1,002)		31			8,233			(126)		6			167,958			(1,128)		37
Total		$	282,342		$	(1,772)		51		$	8,812		$	(131)		8		$	291,154		$	(1,903)		59

		December 31, 2021
		Less than 12 Months								12 Months or Greater								Total
					Gross			Number					Gross			Number					Gross			Number
		Fair			Unrealized			of		Fair			Unrealized			of		Fair			Unrealized			of
Held-to-maturity:		Value			Losses			Securities		Value			Losses			Securities		Value			Losses			Securities
U.S. Government-sponsored enterprises (GSEs)		$	21,901		$	(87)		8		$	—		$	—		—		$	21,901		$	(87)		8
Municipal securities			4,173			(19)		6			—			—		—			4,173			(19)		6
Total		$	26,074		$	(106)		14		$	—		$	—		—		$	26,074		$	(106)		14

The Company reviews the securities portfolio on a quarterly basis to monitor its exposure to other-than-temporary impairment. A determination as to whether a security’s decline in fair value is other-than-temporary takes into consideration numerous factors and the relative significance of any single factor can vary by security. Some factors the

Company may consider in the other-than-temporary impairment analysis include the length of time and extent to which the security has been in an unrealized loss position, changes in security ratings, financial condition and near-term prospects of the issuer, as well as security and industry specific economic conditions.

Based on this evaluation, the Company concluded that any unrealized losses at December 31, 2022 represented a temporary impairment, as these unrealized losses are primarily attributable to changes in interest rates and current market conditions, and not credit deterioration of the issuers. As of December 31, 2022, the Company does not intend to sell any of the securities, does not expect to be required to sell any of the securities, and expects to recover the entire amortized cost of all of the securities.

Other Investments:

Our other investments consist of restricted non-marketable equity securities that have no readily determinable market value. Accordingly, when evaluating these securities for impairment, management considers the ultimate recoverability of the par value rather than recognizing temporary declines in value. As of December 31, 2022, the Company determined that there was no impairment on its other investment securities.

The following is the amortized cost and carrying value of other investments (in thousands):


		December 31,			December 31,
		2022			2021
Federal Reserve Bank stock		$	9,783		$	9,693
Federal Home Loan Bank stock			5,397			6,451
First National Bankers Bank stock			350			350
Total		$	15,530		$	16,494